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A Goldman Sachs associate quit and set up his own private equity fund

Remember when Blackstone founder Steven Schwarzman cautioned Harvard MBAs against thinking they could go it alone after a few years working for someone else? One Goldman associate didn't get that message.

Stuart Smith, an associate covering natural resources in Goldman's Houston-based investment banking division, has just left to set up "Southern Creek Capital." He worked for Goldman for precisely 22 months.

Smith didn't respond to our comment on his motivation for leaving. Nor did he explain what Southern Creek invests in. His LinkedIn profile says he's the co-founder and managing partner of Southern Creek, which was set up in April. The other founder remains a mystery.

It's normal for junior investment bankers to leave and join private equity companies.  Analysts typically quit after two to three years. This is one reason banks like Goldman Sachs have sought to address juniors' working hours in an effort to retain staff. It's less normal for junior bankers to leave and start investment ventures of their very own.

Smith might argue that he has an MBA to help him along his way. He graduated from Duke University's Fuquaa School of Business in 2015. He might also argue that spending four and a half years in the U.S. army, during two of which he was working as a sniper.

Even so, Schwarzman's warning sounds ominous. "I have begged, literally begged — I’ve had people come over to my house on Saturday — and begged them not to do that [go it alone], because they’re going to destroy their careers, because they’re not old enough yet, they can’t raise enough money yet, they don’t have enough credibility,” he told the MBAs. Instead of running after premature glories, Schwarzman told the Harvard class to, “match between your maturity, your timing and that great market opportunity.”

Maybe Smith thinks this triad has come early for him?


Photo credit: What's Next? by sean hobson is licensed under CC BY 2.0.

AUTHORSarah Butcher Global Editor

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